and now a mo that may haunt the gop come 2012. and abandon ship. with each day, with each hour, another resignation, another arrest in the hacking scandal, crippling rupert murdoch's media empire. could the prime minister of england be the next card to fall? this week, washington is going to be debt ceiling, debt deals and debt deals and more debt deals. >> the president made it clear he wants the largest deal possible and wants to do the most we can to reduce the deficit. >> people are moving closer together. you have seen the leadership of the republican party in the senate and the house definitively take default off of the table. >> i am only going to support something that actually solves the problem, and if we don't solve the problem, and not the political problem. i don't care about the politics anymore.

>> see! debt deals. so to end the show, we will lay out the deals on the table. first, the deal that might actually happen which would force the democrats to vote on the debt ceiling again and again, and let republicans pocket $1.5 trillion in spending cuts without giving anything away and set up yet another fiscal commission to kick the can down the road. and then later in the show, we will talk about the debt deal that won't happen, but the one that republicans really want. a deal that would change the constitution in order to make new taxes virtually impossible to pass, and current spending on medicare, social security and more literally unconstitutional to maintain, and would possibly hand over alternate power of the budget over to the courts. finally at the end of the show, we will talk about the sort of debt deal that should happen. it balances jobs and deficit reduction and it won't happen, but today with the possible. the white house talks appear to have fail and the action has moved to the senate where harry reid and mitch mcconnell are

working on a three-part plan that manages to be simultaneously wildly favorable to theps are without being incredibly offensive to the democrats. in modern politics at least at this moment, that seems to be the recipe for success. here is how it'd work. first the debt ceiling needs to be raised three times between now and november and each time the republicans are going to be able to offer a resolution of disappro disapproval, and the idea is to allow democrats to take three unpopular votes on the debt vote, and run against republican party who are looking like the opposition of the debt ceiling. and this is not quite what was harvested from the biden talks and not what boehner wanted, but it is a nice sum for the republicans to pocket. and third, creates a committee of 12 lawmakers charged with sending a deficit reduction plan to congress by the end of the year. whatever they decide on, it is protected from the filibuster

and immune from amendments. this deal has a few alluring features for the republicans. for one thing, it avoids a grand bargain to include taxes, and another, it pockets $1.5 trillion of spending cuts that democrats put on the table as part of the negotiation that was supposed to include new revenues, but maybe the republicans will get in return for nothing. when there is a grand bargain later f there is a grand bargain later, the democrats will have to agree to deeper and more painful spending cuts, because they have given away everything that would not hurt them so much. and thirdly, it denies president obama the economic and political benefits of a big deal now and one that maybe included stimulus and one that would have resuscitated the brand as a post-partisan leader, and one that would have taken the deficit off of the table for election of 2012. a good deal? maybe for the democrats who like bad deals and yet, he might accept it. joining me is senator kent conrad to talk about the deal.

senator, welcome. >> good to be with you, ezra. >> this is the reid/mcconnell deal and not just the mcdonnell deal, and billed by republicans and democrats alike, so what do the democrats see in it? >> i think that about the only thing that anyone can see in it that is positive is averting the catastrophe that would come to the country if we did not extend the debt ceiling and if we fail to meet the obligations and fail to pay our bills, interest rates would spike, and markets would crash, and the economy would flounder. we would be in a very serious situation going forward. so, about the only good thing that it does is to avert that kind of catastrophe. >> but then, what is -- and i agree with you completely on the size and the seriously of the catastrophe of not raising the debt ceiling, but as we look forward to the negotiations of the potential 10-man or 12-man committee that is going to end up deciding the next bargain,

aren't they worried that the republicans will pocket the spending cuts and hold the line or taxes again and so that the ultimate deal is not three to one spending cuts that the obama administration wanted, but something much, much more tilted towards the deeper spending cuts? >> well, that could be the case and it is not attractive at all, but my own view is to have a debt crisis and not to do anything significant about the debt, and $1.5 trillion sounds like a lot of money, but you and i know, ezra, it does not change the trajectory we are on. we are headed for a debt that is 250% of the gross domestic product of the country if we fail to take substantial action to deal with the debt threat. and it does not take any action to lift a weak economy. we are going through a recovery, but it is a weak recovery. one of the things that's needed almost every bipartisan

commission has concluded that in the short term, some additional lift spending on infrastructure for example which i would strongly favor and then pivot in dealing with the debt threat. >> well, this is a big frustration of mine to get into later in the show, but people look at the jobs and the deficit adds somehow being alien to one another, and somehow intentioned, when it seems to me that it is very easy to imagine a deal where the fact that you have a sort of certain amount of economic lift in the beginning and as you say a large infrastructure package to help you get larger concessions on the long-term deficit from liberals and if the jump spending works you would have a much easier time dealing with the deficit problem later, and it seems like it should be a win-win and yet not only can you not seem to get anybody to consider it in washington, but it hasn't been something that the democrats have made core to the negotiations and you have not heard them say, look, if you want a big deficit deal, fine, but no way to move forward if we are not helping out the jobless now, and that is confusing me,

because why hasn't the party drawn a line on that? >> because of the rigidity of the other side. look, what has been clear is that republicans are dealing in a dream world with respect to where this debt is headed. as i say, every bipartisan commission that has take then problem on has come back with a ball lanced approach whether it is additional revenue and broadening the base and some cases lowering the tax rates to help make the country more competitive, but also spending cuts and entitlement reform, a full comprehensive package on the range of $4 trillion and everyone knows that is about what is required to change the trajectory that the country is on, and our friends on the other side are especially in the house of representatives in deep denial. they don't want to go there. they don't want to touch revenue, because they are terrified of grover norquist and what he threatens to do with

them in terms of the primary opponents, and so rationality is out of the window. what we are left with is extreme rigid ideology which has never been a very good way to get problems solved in this town. >> and you have mentioned the bipartisan commissions and it has been a groundhog day effect happening and the quick history for those who don't know, you and your colleague senator gregg sponsored a bill to create a bipartisan debt commission to have congressional privilege a couple of years back and when it came up, some republicans who were for it fill buibustered it death, and then the president who didn't have much congressional privilege and that was not quite to get to the supermajority it needed, but it came out with the simpson/bowles recommendations, and so why should anybody believe to do another 12-person commission is going to have a different result? >> i don't know. i served as you have indicated on the previous commission, and i'm proud of the work.

that, too, was not without controversy, but it was comprehensive and it was a $4 trillion package and a i have been part of the group of six, and we have a package that's about $4 trillion that also is balanced, has all of the key elements, and so, you know, you had da minchey and they had another balanced budget in the range of $4 trillion, so we know, look, what needs to be done in this town, but getting i don't without the historical rigidity of those in the house of representatives. for those who say that any tax increase will crater the economy and the last time i heard that is the last time we balanced the budget. back in the '90s under clinton in '93, we had a major package and not a single republican voted for it. it did most of the heavy lifting that led to balanced budgets actually paying down debt.

and interestingly enough, it didn't crater economy and instead, the longest uninterrupted growth in the nation's history and created 24 million jobs, so for those who say that deficit reduction including revenue means that you crater the economy, that is not the historic record. >> senator kent conrad of north dakota, thank you so much for joining me today. >> you bet. next, could keeping elizabeth warren on the sidelines come back to bite the senate republicans right where it hurts? stay with us. i'm jon haber of alto music. my business is all about getting music into people's hands. and the plum card from american express open helps me do that. you name it, i can buy it. and the savings that we get from the early pay discount has given us money to reinvest back into our business and help quadruple our floor space. how can the plum card's trade terms get your business booming? booming is putting more music in more people's hands.

with olay challenge that. regenerist day and night duo. the uv lotion helps protect skin and firms during the day. the cream hydrates to firm at night. gravity doesn't stand a chance. regenerist, from olay. morning starts with arthritis pain... that's two pills before the first bell. [ bell rings ] it's time for recess... and more pills. afternoon art starts and so does her knee pain, that's two more pills. almost done, but hang on... her doctor recommended aleve because it can relieve pain all day with just two pills. this is lisa... who switched to aleve and fewer pills for a day free of pain. and get the all day pain relief of aleve in liquid gels. but when she got asthma, all i could do was worry ! specialists, lots of doctors, lots of advice... and my hands were full. i couldn't sort through it all. with unitedhealthcare, it's different. we have access to great specialists,

and our pediatrician gets all the information. everyone works as a team. and i only need to talk to one person about her care. we're more than 78,000 people looking out for 70 million americans. that's health in numbers. unitedhealthcare. is now honey nut cheerios! yup, america's favorite. so we're celebrating the honey sweetness, crunchy oats and... hey! don't forget me!! honey nut cheerios. make it your favorite too!

today, the president announced his choice to lead the consumer financial bureau and it was not elizabeth warren and not that warren who is the superstar harvard professor who came up with the agency and spent the

last year to get it off of the ground is not qualified, but you could make the argument that she is truly the only candidate qualified for the job she thought up herself, but she is not confirmable. but not confirmbibab confirmabl problem only for warren. today, president obama announced his candidate from ohio. what do you think of him, mr. president? >> i asked elizabeth to find the best possible director of the bureau and that is who we found in richard cordrey. >> but the only problem, he is not confirmable either and not that the resume is thin, because he has a great e reputation in consumer protection circles and very forward in the foreclosure fraud, and he is within of the first to come help her agency, but the problem is that the republicans won't confirm anyone, because they don't want the agency to exist in the first place. rich mcconnell said it is not e liz warren-specific, but it's

any nominee. this may be a decision that the republicans come to regret. because warren has another option that she is taking pretty seriously, challenging scott brown in the 2012 election and roll call reporter said that the counter sure looks like a scheduled woman who is considering a senate bid. in recent weeks, warren has met in person or spoken with patty murray, david axle rod, senator charles schumer and senator john kerry and massachusetts democratic representatives barney frank, and steven lynch and john tear nee, but if she, but she want ts to go for a run she can't spend the next year angry at the filibuster republicans, but spend part of it for her candidacy. meanwhile, cordray doesn't have anything to run for until the ohio governorship opens up in

options. so at some point, the republicans have to make a choice and do they want someone to run the agency that exists and is in law now, or do they want to freeing potential democratic candidates to spend their time running against, well, republicans. and we have delon from the "washington post." good to see you. >> hi, ezra. >> by this time next year, will this agency have a permanent director? >> well, as you mentioned before, it is unclear if anyone can be confirmed for the position. the reason that it is so important for this agency in particular is because without a director, the agency can't make full use of the powers, and it does not have the power to write new rules or the power to oversee what many of them call non-bank firms and nonfinancialal institutions such as check cashers or payday lenders and some of those firms are the most shady of companies in the financial industry, and

the cfpb would be the first regulatory body to actually have the power to oversee them, so without a director, this agency misses many of the potential new powers it was created to do in the first place. >> and what if obama makes a recess appointment and would the director then have the full powers of the agency? >> the director would have the full powers of the agency, but it would be for a limited time, and someone who is appointed through a recess appointment can't forever, and can't serve for the full five years that is director position can have. and the other thing about the recess appointment, too, to remember is that the republicans can still block a recess appointment by preventing the senate from going on recess. so it seems that right now even though the president has a nominee, and put a name out there finally a year after this bureau was created, he is still in the same political logjam that he was a few months ago. >> and what about warren's future? she was asked earlier today about running for senate in massachusetts by andrea mitchell, and listen to what she said? >> massachusetts does beck conn

in the sense that i am home there, and when i go home, i will do that thinking, but i need to do that thinking not from washington, but i need to go home. >> that is a whole lot of not saying no right there. have you heard anything on that? >> well, i have spoken to many people close to her and they say that senate is not off of the table for her and it is something that is still a possibility and earlier today, a progressive groups launched a "draft elizabeth warren for senate campaign" after she didn't get the top job, and they are thinking of another route for her and clearly there is support for her, but it is unclear what she will do and unclear where she will find the money to fund a campaign. >> and what would actually if anything appease the republicans on the consumer protection bureau? is there any way to offer consensus to make it not toothless, but get a director?

>> right now the republicans are drawing a hard-line and three things in particular to look for. first thing they are looking for the agency to be changed from having a single director being head bade five-person commission and looking to change the funding of the agency to make the agency subject to the appropriations process as opposed to being funded through the federal reserve and also looking for other regulatory agencies to have a greater veto power over the decisions, and those are big concessions that republicans are looking for from democrats and the president today did say that he is going to fight vigorously to any efforts to undermine some of the financial reforms that were put in place last year. >> and thank you so much for joining me. >> thank you. and tonight, watch for elizabeth warren who is a host on the rachel maddow show at 9:00 p.m. eastern. good get, rachel. and newt gingrich is in trouble with the private planes.

are you anxious to protect your family with life insurance... but afraid you can't afford it? well, look how much insurance many people can get through selectquote for less than a dollar a day. selectquote found, rich, 37, a $500,000 policy for under $18 a month. even though dave, 43, takes meds to control his blood pressure, selectquote got him a $500,000 policy for under $28 a month. ellen, 47, got a $250,000 policy for under $20 a month. all it takes is a phone call. your personal selectquote agent will answer all your questions ... and impartially shop the

highly rated term life companies selectquote represents for your best rates. give your family the security it needs at a price you can afford. call this number or go to selectquote dot com. selectquote. we shop. you save.

you may have thought that newt gingrich's finances which seemed to rely heavily on the

lines of credit from tiffany's were bad for a presidential candidate, but are they worse than you thought? with confirmation that gingrich's campaign is $1 million in debt comes word that almost half of the total is owed to -- wait for this -- moby dick airways a private plane company that does a lot of of work for republicans. so is this the white whale that is going to finally sink newt's campaign? more about this from michelle coddle from the daily beast. >> well, we know running for president is expensive, but for a guy preaching fiscal conservativism is not what you preach, and is newt aware he is running for president? >> well, what you have to remember here, ezra, is that newt's presidential campaign is all about the kind of self-aggrandizement of newt, and in order to maintain the lifestyle, certain things have to be done and if he has to spend half a million on private planes, so beit. >> there is a lifestyle to which

newt has become accustomed and the presidential funders will have to help him out, and also they point to a $8,400 disbersment to gingrich productions which has calista gingrich as a domain name. i have registered the domain names, and they are $20 and not that much, so any idea what he is actually paying for, because that looks kind of bad? >> well, at that point, i think that pretty much we can expect if there is a mistake to be made, the gingrich campaign is going to make it. he doesn't seem to kind of grasp the basics of conflict of interest or fiscal responsibility questions -- i mean, dead man walking is the phrase that leaps to mind when we talk about the gingrich campaign. >> but in so much more style than dead men usually get. >> it is true. >> and so let's talk about michele bachmann at a moment, because you have a interesting article about her, and gay rights groups are vowing to make

her a target, and for the intolerant views she has expressed in the past or what they say are intolerant views she has expressed in the past. >> and she is going for a conservative base, and i have talked to richard land over at the southern baptist convention and some of the people, and for the base, this is going to be an issue that actually wins her sympathy, the more she is slapped around for sticking to her core moral beliefs, the more it is going to make her seem like somebody who sticks by her guns, and who won't bend to popular opinion. >> authenticity. michelle cottle, thank you so much. >> thank you, ezra. next, the hacking scandal intensifies, and rupert murdoch's empire shows new signs of collapse. stick with us. [ female announcer ] ever wish vegetables didn't taste so vegetably? well, v8 v-fusion juice gives you a full serving of vegetables, plus a full serving of fruit. but it just tastes like fruit.

and try our deliciously refreshing v8 v-fusion + tea. with listerine® whitening plus restoring rinse. it's the only listerine® that gets teeth two shades whiter and makes tooth enamel two times stronger. get dual-action listerine® whitening rinse. building whiter, stronger teeth. thought they were dead. [ laughter ] [ grunting ] huh? [ male announcer ] should've used roundup. america's number one weed killer. it kills weeds to the root, so they don't come back. guaranteed. weeds won't play dead, they'll stay dead. roundup. no root. no weed. no problem.

here is a fun fact pointed

out by twigger wag at pour me coffee. quote in britain the huge line of people waiting to resign over the murdoch hacking scandal is called a queue. and a major blow to sir paul stevenson on sunday was arrested. and we are less than 24 hours away from rupert murdoch and his son james and rebekah brooks freshly bailed out of jail standing before parliament to present their side of the scandal. for this side of the story, we go to stephanie gosk in london. stephanie, thank you for joining me. >> you're welcome, ezra. nice to be here. >> stephanie, more breaking news out of london and there are reports that the former "news of the world" showbiz reporter and accusing andy colson of hacking phones is found dead. what do you know about this?

>> well, a bizarre twist to the story, he became the center of this saying that yes, andy colson knew about the phones hacked and he listened to some of the phones i listened to. he was found dead in his home, and the police are saying that it is not treated as a suspicious death, but they are investigating the cause. another bizarre twist of a day that has seen enough of them already with the resignations of two of the top brass over at scotland yard. ezra. >> and speaking of scotland yard, how have they responded to the resignation of two senior officers in less than 24 hours. that is a high rate? >> well, the institution, itself, is reeling. you know, it just goes to show what the climate is like in this country right now that they would resign and resign so suddenly, and so quickly, one right after another. but the concerns right now are

for the scotland yard's business and what it does not just? the folk hacking investigation, but larger issues like counterterrorism and the fact that next summer this city is hosting the london olympics and both of to officials have said that the distraction, they are concerned, over their position in the phone hacking position would get in the way of these larger pursuits arguably more important pursuits. >> and rebecca brooks who is testified tomorrow was arrested and released on bail yesterday and she is expected to stand in front of parliamentt tomorrow, and to my knowledge still is, but is there any reaction to that or any change in the schedule? >> no, she is going to be attending. when she was originally arrested the spokesman said that may call into attention whether she at the ends, but they say she is. and her lawyer came out saying that she went willingly to a

pre-set appointment to scotland yard and not knowing she would be arrested and it was a surprise. she was held for nine hours and no for mall mal allegations or presented any evidence against her, and she is now talking about defamation for herself and the harm that it has done her career to be arrested by scotland yard. he came out with a strong statement today. ezra. >> and nbc's stephanie gosk, thank you very much. if the scene in parliament is any indication of what is to come tomorrow, mr. murdoch is in for a rough day. >> in order! what is dodgey dave going to do the decent thing and resign? >> with a preview of what to expect from the hearings tomorrow and other possible shake-ups, i'm joined by felix gillet who is a writer for "newsweek." and he says he does not have

concern about those attacking him, but should we expect them to come out with claws drawn? >> well, they are coming out with the phone hacking and what do you know about it and when did you know it and what about the payments to the police and in a larger sense, why are you still fit to own media properties in the uk? and part of the great drama here is that here is a guy who is famous for not apologizing to anybody, and here he is asked to go in front of the world and asked to apologize, and everyone here is going to see if he is constitutionally capable of doing it, and it is unclear if he is, and he has a pr team sitting there training him to be contrite and show remorse, but really remains to be seen tomorrow when he is actually grilled by these parliament, can he do it? >> it is like the fonz trying to pronounce the word sorry from the old "happy days"? >> yes. >> and it is getting closer and

closer to david cameron the prime minister of the uk and is this close enough to topple him? people talk about it, but it sounds remarkably heady. >> well, at one level, it is inconceivable that it could take him down, but everyday we are seeing more inconceivable things happen as this story progresses, and he is vulnerable. he is very close with the rebekah brooks who just resigned from "news international" who was arrested and very close with andy colson who was also arrested so at a certain point every time this is in the news, this investigation, it is going to come up, why is andy colson working for him and associating with these people and it is damaging. >> across the pond, how is this affecting rupert murdoch's american properties? i saw that "the new york times" today had an editorial called defiant one word for it, and it is not received particularly well, but beyond that, is that a show? what are tzations feeling

like? >> well, everybody is nervous and sort of all hands on deck at the murdoch properties. it is a family organization and the father of the family is in trouble, and all of the kids are nervous at this point, and i think that, you know, the other aspect here is that shareholders are incredibly restless and the share prices are beaten up and serious questions about the leadership of this company which seems inp credibcredible that pe asking these questions, because rupert has utterly dominated this company for so long and now shareholders are saying, why is he running this company like a family business and it is a public company, and he has to do what is best for the shareholders. >> one thing that is somewhat surprising for people to learn is that there is a lot of cross poll nation between the uk leadership, and some of the american properties, so anywhere there are beginning to be signs that it might jump to or so far fairly contained? >> well, les hinton who is the

head of the dow jones and the publisher of the "wall street journal" had to resign and he was previously the head of news international overseeing the newspapers where the hacking was taking place and that is the first big one so far, but there is back-and forth movement between the executives and the reporters and the editors at the newspapers at news corporation, and a lot of questions are being asked. does it make sense that it would only take place with the papers in london, and what was preventing it from takes place at the newsrooms here in new york? and so far, it is limited to les hinton resigning, but other questions will be raised. >> thank you so much. >> thank you. and when we come back, the debt ceiling deal that won't happen, and thank god for that.

[ male announcer ] get ready for the left lane. the volkswagen autobahn for all event is back. right now, get a great deal on new volkswagen models, including the jetta, awarded a top safety pick by the iihs. that's the power of german engineering. hurry in and lease the jetta s for just $179 a month. ♪ visit vwdealer.com today. morning starts with arthritis pain... that's two pills before the first bell. [ bell rings ] it's time for recess... and more pills. afternoon art starts and so does her knee pain, that's two more pills. almost done, but hang on... her doctor recommended aleve because it can relieve pain all day with just two pills. this is lisa... who switched to aleve and fewer pills for a day free of pain. and get the all day pain relief of aleve in liquid gels.

welcome back.ilissa rehberg

newsroom with stories developing right now. new fallout from the catholic church sex scandal. a new cardinal is expected to resign this week five months ago, a grand jury report accused the archdiocese from stopping numerous cases of sexual abuse. following that report 21 priests were resigned and suspended. forecasters say that the scorching heat is going to get worse as the week goes on. right now, there is a severe threat of thunderstorms from the northern plains to the northeast. and it turns out that rocket scientists had to take out the trash. check out this robotic arm doing the slow and steady dirty work on the international space station. crews used the robot to remove a canister the weight of a bus filled with about three tons of packing foam and trash. the bin was then placed aboard

the shuttle "atlantis" to be dumbed back here on earth and they are scheduled to undock tomorrow and touch down back home thursday of course on the very last shuttle program mission. ezra. >> thank you, milissmilissa. >> and everything that you need to know about the debt ceiling deal. -huh, uh-huh ♪ [ male announcer ] introducing mio. a revolutionary water enhancer. add a little...add a lot. for a drink that's just the way you like it. make it yours. make it mio. he was all like "oh no, i cannot do investing." next thing you know he's got a stunning portfolio. shhhh, you're welcome. [ male announcer ] e-trade. investing unleashed. so i took my heartburn pill and some antacids. we're having mexican tonight, so another pill then? unless we eat later, then pill later?

if i get a snack now, pill now? skip the snack, pill later... late dinner, pill now? aghh i've got heartburn in my head. [ male announcer ] stop the madness of treating frequent heartburn. it's simple with prilosec otc. one pill a day. twenty-four hours. zero heartburn. no heartburn in the first place. great.

i'm hampton pearson with the cnbc market wrap. here is a look at how the stocks are doing with 15 minutes left in the trading day. mostly in negative territory and the major averages the dow is down 107 points and the s&p down almost 12 and the nasdaq down about 23 points. drug companies are getting the green light for this year's flu vaccine, and the fda just approved the flu shot which is ready for the fall. and a new study on retirement savings like 401(k) plans highlight some gender

differences in the report. women at almost every income level were more likely to participate in the 401(k) plans than the male colleagues, but while the women are saving more, they are making less than men whose account balances are higher. that is it from cnbc, first in business worldwide. ezra, back to you. >> back in april, house democrats played a bit of a trick on the republicans. this is during the budget battles and in the republican study, this is the ultraconservative wing of the republicans, wanted their budget which is far more draconian than paul ryan's budget to be considered on the floor. this congress, this sort of thing happens all of the time and you bring up a bill that could not pass in million years and you watch it voted down and tell the people, that we tried our best, but then the democrats played a game. they didn't vote no, but they voted no and then changed the votes to present. as brian summed it up from

talking points, panic ensued as the dems flipped to present and they realized that ir that members had gone on record to support the plan and if the vote closed, it would pass, which was toxic for the republican party, and congressman ryan. so they killed the vote, and that was a good move, because the budget was incredibly extreme. but if it was so extreme and they know it, why today are the house republicans trying to right the committee's budget into the constitution itself. when you hear about cut, cap and balance, that is what they are talking about. the plan is to rewrite the constitution to require a 2/3 of majority in both houses of congress to increase taxes, and requirement to balance the budget. bruce bartlett, a former reagan administration economic official looked at this, and let's say he was unimpressed.

it is quote quite possibly the stupidest constitutional amendment i think i have ever seen. he wrote. it looks like it was draft bade couple of interns on the back of a napkin. now, this amendment is so radical that even paul ryan's budget would be rendered unconstitutional and every year of ronald reagan's presidency unconstitutionality and george bush's presidency, unconstitutional and the spending levels are so low that we have not seen anything like it since the '60s. so there is a new graph comparing then to now. back then our population was under 200 million and now it is above 300 million and back then life expectancy was 70 years and now it is 79 years -- and all of the figures adjust for inflation. the average person spent $1,500 on elt cahealth care and now it more than $8,000, and back then social security checks were $740

and now they are more than $1,800 and as a report says, we can't put a 1966 transition into a 2012 mustang. the gop knows that, and that is why when they looked at the studies of the budget, they voted it down. this an attempt to resuscitate it which is what they failed to do last time, get on the record supporting something that the tea party would love and the republicans think sounds good in the campaign, but with the safety knowing that the president and the senate democrats would vote to kill it. it is a big con. and joining me is the top economic adviser to joe biden, and senator fellow on budget and policy. >> good to see you. >> and you are different affiliations. >> that is right. sorry about that. >> what would we have to throw overboard in order to make the numbers work? >> that is a great question. it is the one factoid i didn't

hear in the excellent introduction. >> waiting for you. >> thanks for saving these. look, this thing, within a new fiscal year, the 2012 fiscal year which starts in 70 days or so, it would require a cut of $111 billion, okay. that's a little bit less than, about 7/10ths of a percent of gdp. if anybody in their right mind thinks that this economy went from fragile to frail with the last couple of jobs reports can sustain an extraction of $111 billion of federal spending right now, i'm not sure what planet they are living on. most of the responsible budget plans including the fiscal commission and rital ridalin/deminchey, and you would see the safety programs that people need and also

entitlement, infrastructure and education, and pretty much everything that is vulnerable in the sounds good. capital spending sounds good. it's when you get specific these things get ugly. so if democrats going for their own balanced amendment budget they're not going to force them to get specific to lay out the cuts. it they can't do that they've lost the argument before it's begun? >> you're right. unfortunately this thing pulls in the stratosphere. when you gut up to 80, 90% public approval, that's catnip for politicians. the way to actually help people understand this is to get under the hood. it's really easy to say, we should cap spending at 18% of gdp. by the way, you're absolutely right. back in the reagan days that was 22%, under clinton and bush, even bush ii, talking 20%. we're talking unprecedented level. congress cannot right into the

constitution with any level of decent conscience their work which ought to be a matter of figures out where they can actually implement the cuts we need get on a sustainable path. this president helened forward in recent days. he's the one in a brought stuff to the table and is trying to set out that path, but, of course, he's being blocked every step of the way, most recently with basically a complete hand wave saying, let's sign up for 18%. >> that's nice work getting lean forward in there. the one thing i enjoyed when reading the mmdment, so many horrible parts tucked away in. it one part says the supreme court can't order congress to tax, but it leaves open the option for it to ord ter to cut. what i took from that was that they know that this, because you -- this amendment, because you can't raise taxes, it's such a low level, they won't get that through congress. congress has a terrible time doing budgets in more normal times. >> exactly.

>> what it would do, seems to be the mother of all judicial activism, shunt it over to the courts. the court won't want to raise taxes and the supreme court will cut spending and tell us by how much and depending how it worked out at the court by real. in strikes as a rough future. >> it's what these folk are actually hired to do and reminds me a little of the mcconnell option, although granted that may heb get us over the hump but a great way to keep your fingerprints off something if want to. this completely takes the government's ability to implement countercyclical economic policy. so the economic hits a recession, we're obviously still struggle wig the last one, automatic stabilizers kick in pshgs help for medical coverage. food and nutrition for family. that stuff would absolutely not be allowed under a balanced

budget amendment, because revenues are sage. you mentioned, the stable irzs that help the economy get back on track. >> yeah. that seems like a huge problem. the other thing is does, makes it very attractive to spend through the tax code. it wouldn't be part of your spending cap. you get a tax break. the end result of the that, we end up way mattively more loophole filled tax code which everybody believe wes have too much of now and certain more in the future. >> absolutely. the white house released one of these statement of the administration policies on this, s.a.p.s. dry documents. they say for various policy reasons we don't like this. the white house called this an empty political statement and said the bill sets a false and unacceptable choice between the federal government defaulting on its obligations now or passing an amendment that will likely leave the nation unable to meet its core commitments in years to come. sharp. the only thing to like it's

certainly not going anywhere, but what a time to scrscrewing with a check the box vote. >> jared, thanks for joining me. >> my pleasure. we will be right back.

every day you live with the pain of moderate to severe rheumatoid arthritis could be another day you're living with joint damage. help stop the damage before it stops you by asking your rheumatologist about humira. for many adult patients with moderate to severe rheumatoid arthritis humira has been proven to help relieve pain and stop joint damage. humira's use in patients with ra has been evaluated in multiple studies during the past 14 years. humira can lower your ability to fight infections, including tuberculosis. serious, sometimes fatal events can occur such as, infections, lymphoma or other types of cancer,

blood, liver and nervous system problems, serious allergic reactions, and new or worsening heart failure. before starting humira, your doctor should test you for tb. ask your doctor if you live or have been to a region where certain fungal infections are common. tell your doctor if you have had tb, hepatitis b, are prone to infections, or have symptoms such as fever, fatigue, cough, or sores. you should not start humira if you have any kind of infection. make today the day you talk to your rheumatologist. and ask how you can defend against and help stop further joint damage with humira. like, keep one of these over your head. well, i wasn't "supposed" to need flood insurance, but i have it. fred over here chose not to have it. ♪ me, i've got a plan. fred he uh... fred what is your plan? do i look like i have a plan?

not really. [ female announcer ] only flood insurance covers floods. for a free brochure, call the number on your screen. it's time to "clear the air." in today's program we spent time on bad debt that might pass and worse debt deal that won't. what about a good one? is that even possible now? politically, maybe not, but economically, absolutely. during his remarks last friday president obama made the case why liberals should care about deficits. a progressive concerned as much as a conservative. the reez, if the only thing we're talking about the next two, five years debt and deficits it's hard to talk about how to make investments. fair quote. writing on his blog, economists

blogged along why obama wasn't making the opposite case. conservative shos care about jobs. he wrote back to obama that he should have said, if you are a conservative, you should be even more concerned about reducing unemployment and speeding growth than a progressive. the reason is that a rapid economy recovery is the only thing that can materially reduce the burden of the debt over the next one, two or three years. a policy to reduce the deficit will largely fail without a strong recovery. you know what? they're both right. a good deal would take deficits and jobs. it's not rocket scientist. imagine a 311 deal, i call it. for every $3 cuts, $1 stimulus. every dollar that went for jobs now means $4 for deficit late are. even if you don't care about jobs, don't believe in stimulus, you should like this deal, because it means you'll be able to get liberals to agree do much more in long-term deficit

reduction and if it helps in the jobs deficit reduction becomes easier. those who care about jobs, the more deficit reduction, the your nobs support. a chance our massive debt could begin to hurt the economy over the next five or ten years getting different set reduction in place now could protect the recovery once it's taken hold. now, we don't need to choose between jobs and deficaficit reduction. trying to both marks it hard are harrer to achieve. we're being forced to choose between bad deals or worse deal. not because those are the only deals that are possible and we need to remember that. it's because of the only ones republicans in washington will consider. we can do better. and we should. thank you for watching. you can find more of my writing at washingtonpost.com/ezra klein. dylan ratigan picks things up. senator tom coburn on today? >> in fact we do. the show begins now, ezra. thank you ry